Before the current economic crisis became apparent to all, the most popular fable used to describe America’s uncanny economic resiliency was the story of Goldilocks. It was argued that our economy was skipping down a sunny path of moderate growth, low inflation and rising asset prices. However, a much better parable for our economy over the last decade would have been the story of Humpty Dumpty: a bloated, fragile shell perched on the top of a dangerously high stone wall. This week, all the government’s horses and all of its men scrambled to put Humpty Dumpty back together again. Here is a look at some of this week’s highlights:
The Mother of all Moral Hazards
No doubt prodded by the administration, Fannie Mae and Freddie Mac announced a new attempt to stop the fall in home prices and foreclosures through a loan modification program that would cap mortgage payments so that a homeowner’s total housing expenses would not exceed 38% of household income for home owners who are 90 days delinquent.
In a classic case of unintended consequences, the plan will encourage a massive new round of delinquencies and household income reduction as homeowners will jump through hoops to qualify for the program and maximize their benefit. Those who could conceivably economize to meet their existing obligations will now have a strong reason to forego such sacrifices. Those who are not 90 days past due will intentionally become so. In many cases, dual income families may decide to eliminate one job altogether as reduced mortgage payments combined with lower child care and other work related expenses will likely exceed the after-tax value of the lost paycheck.
Unfortunately, the last thing our economy needs is falling household incomes and even more bad debt. But that is precisely what this plan will give us.
Somali pirates are in command of a Saudi supertanker in the Indian Ocean after staging their most daring hijacking yet off the coast of Kenya.
The Sirius Star, owned by the Saudi company Aramco, is the largest ship ever taken by the pirates, and can carry a cargo of crude oil worth more than $100 million.
As pirates have become better armed and equipped, they have sailed farther out to sea in search of bigger targets, including the oil tankers, among the 20,000 tankers, freighters and merchant vessels passing through the Gulf of Aden each year.
Attacks have increased by more than 75 per cent this year.
With many attacks ending with million-dollar payouts, piracy is considered the most lucrative work in Somalia. Pirates rarely hurt their hostages, instead holding out for a huge payday.
The strategy has been effective: a report last month by a London-based think-tank said pirates have raked in up to $30 million in ransoms this year alone.
French and Spanish police arrested the reputed leader of ETA’s commando units on Monday — dealing a devastating blow to the armed Basque separatist group.
Mikel de Garikoitz Aspiazu Rubina, 35, is suspected of taking part in several killings, including the December shooting deaths of two Spanish guardsmen in France, according to French and Spanish officials.
Spanish Prime Minister Jose Luis Rodriguez Zapatero said Aspiazu Rubina — known by the alias “Txeroki” (pronounced cher-OH-kee) — has been the operational chief of ETA’s hit squads and bombing units for several years.
The armed group has been fighting since the late 1960s to create an independent Basque homeland in northern Spain and southwest France. The violence has claimed more than 800 lives.
A car carrying one of Israel’s top mafia kingpins exploded as it traveled in central Tel Aviv on Monday, killing him and threatening to unleash an all-out war in Israel’s increasingly violent underworld.
Israeli police officials identified the dead man as Yaakov Alperon — known informally as “Don Alperon” — the head of one of the country’s most powerful crime families. The bloodied body was wearing the same polo shirt Alperon was seen sporting earlier in the day at a Tel Aviv courthouse.
Medics said three bystanders were also lightly wounded in the explosion, including a 13-year-old boy.
Israelis are accustomed to violence with their Palestinian neighbors but have traditionally felt relatively safe from violent crime. In recent years, however, mob wars also have plagued Israeli towns and cities.
Rival underworld gangs have waged bloody battles for control of gambling and protection rackets, including one involving bottle recycling.
Funny you ask, I have been rocking tons of One Buttons lately and chopping it up like a chainsaw thru Nutella. (And I love Nutella.)
Although I am no fashion historian, I would say it goes like this:
One Button Suit: Kind of Jazz man smooth. Rat pack steez. Stylishly sleek. Good for picking up Models and Nightlife Princesses. For the Nightshift. Swooping fly girls on the veranda overlooking the Med. Suit worn not because you have to wear a suit for work.
Two Button Suit: Universal. Biz Stilo. Works well on all builds. Good all around battle tested swoop gear. Timeless. JFK.
Three Button Suit: 60’s Mod style. Good for taller cats. Can be Rakish.
Side note:
Four Button Suit: NFL wide receiver. A la Michael Irvin.
